Latest update November 22nd, 2024 1:00 AM
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- Exxon wants new oil block on own terms
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Exxon wants new oil block on own terms
—-walks out auction after govt refuses to budge
Blocks in red received bids during the maiden auction
Kaieteur News- ExxonMobil Guyana Limited (EMGL) has pulled out of the first oil block auction initiated by the Government of Government (GoG). This is according to Vice President Bharrat Jagdeo. He made that disclosure on Thursday at his press conference at Freedom House.
ExxonMobil, Hess New Ventures Exploration Limited, and CNOOC Petroleum Guyana Limited were approved for shallow water block –S8. Last month, the Ministry of Natural Resources in an update on the competitive bidding round for the petroleum exploration licences, disclosed that four companies have accepted the new Production Sharing Agreement (PSA) while ExxonMobil is still reviewing the PSA.
Jagdeo was asked for an update on the auction and during his response on why this process has been dragged out this long, Jagdeo disclosed, “…So then the others, remember Exxon pulled out and they wanted to use the area for carbon capture and storage and we don’t want to do that at this stage.”
Vice President, Bharrat Jagdeo
Guyana’s maiden auction launched in December 2022 featured 14 blocks but only eight received bids. The fiscal regime of the new PSA requires the payment of a 10 percent royalty and a 10 percent corporate tax. The cost recovery ceiling will be capped at 65 percent in a given year, while profits will be shared 50/50 between companies and the State
ExxonMobil is the operator of the Stabroek Block and it holds 45% interest in that block. Its partners Hess and CNOOC hold 30% and 25% respectively. Guyana’s oil-rich Stabroek Block, operated by ExxonMobil, requires a meagre 2% royalty, no taxes, 75% cost recovery ceiling each month which leaves 25% of profit to be shared with Guyana. Stakeholders had warned that the terms of the Exxon deal could deter investment since the new PSA now requires greater fiscal benefits for the country.
This led to calls for new projects in the Stabroek Block to be subjected to these terms; however, the government remains adamant that seeking greater benefits could slow the pace of development and chase investors.
Moreover, Block S4, a shallow water portion, has been awarded to TotalEnergies EP Guyana B.V. in consortium with Qatar Energy International E&P LLC and Petronas E&P Overseas SDN BHD. Out of Nigeria, International Group Investment Inc. was found eligible for two shallow water concessions—S5 and S10. An American and Ghanian partnership, Liberty Petroleum Corporation and Cybele Energy Limited, was approved for the shallow water block—S7. Delcorp Incorporated, a Guyanese company, in collaboration with Watad Energy and Communications Ltd and Arabian Drilling Company was approved for a deepwater block titled—D1.
Government had disclosed that International Group Investment Inc. accepted the PSA with processing ongoing; Cybele Energy Limited accepted the PSA and is in the final review stage; Delcorp accepted the PSA and is now in the final stages of review and the TotalEnergies-led consortium accepted the PSA and is currently in the final review stages.
(Exxon wants new oil block on own terms)
- CNOOC Petroleum Guyana Limited, ExxonMobil, Guyana’s maiden auction, New Ventures Exploration Limited, TotalEnergies
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